Forfeitures used to reduce ER contrib

[Guest LAAllen]

401(k) PSP document allows for forfeitures to be used to reduce ps contribution for that year. If no contribution is made, is there any regulation that "requires" the plan to make a contribution (thus the contribution for the year would be exactly the amount of the forfeitures for the year).

We have carried over forfeitures until the year a ps contribution was made- however, were recently told by an attorney that he was under the impression that there was a regulation that would disallow this....that even if no contribuition was made, we would still need to allocate forfeitures.

Anyone?

Thanks

Lisa

[wmyer]

Does the plan document address the timing of forfeitures at all? I don't know of any regulation that requires a reallocation of forfeiture within a certain timeframe, but usually the plan document will specify a timeframe. If the document is silent, I am uncomfortable with leaving the forfeiture in a segregated account for an indefinite period.